Correlation Between Lotte Non-Life and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Lotte Non-Life and LabGenomics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lotte Non-Life and LabGenomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Non Life Insurance and LabGenomics Co, you can compare the effects of market volatilities on Lotte Non-Life and LabGenomics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lotte Non-Life with a short position of LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non-Life and LabGenomics.
Diversification Opportunities for Lotte Non-Life and LabGenomics
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lotte and LabGenomics is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics and Lotte Non-Life is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lotte Non Life Insurance are associated (or correlated) with LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Lotte Non-Life i.e., Lotte Non-Life and LabGenomics go up and down completely randomly.
Pair Corralation between Lotte Non-Life and LabGenomics
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the LabGenomics. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 1.22 times less risky than LabGenomics. The stock trades about -0.14 of its potential returns per unit of risk. The LabGenomics Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 279,500 in LabGenomics Co on November 27, 2024 and sell it today you would lose (6,500) from holding LabGenomics Co or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. LabGenomics Co
Performance |
| Timeline |
| Lotte Non Life |
| LabGenomics |
Lotte Non-Life and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non-Life and LabGenomics
The main advantage of trading using opposite Lotte Non-Life and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non-Life position performs unexpectedly, LabGenomics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LabGenomics will offset losses from the drop in LabGenomics' long position.| Lotte Non-Life vs. JYP Entertainment Corp | Lotte Non-Life vs. Iljin Display | Lotte Non-Life vs. Digital Multimedia Technology | Lotte Non-Life vs. Playgram Co |
| LabGenomics vs. Kyeryong Construction Industrial | LabGenomics vs. Daewoo Engineering Construction | LabGenomics vs. Dongwoo Farm To | LabGenomics vs. Sejong Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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